A Financial Power of Attorney is a document that should be part of everyone’s estate plan. It designates which person will manage your finances if you are unable to do so yourself. Without this document in place, upon your incapacity, your loved ones would have to open a conservatorship for you through the probate court, which typically costs thousands of dollars per year and involves heavy court supervision.

There are two common types of Financial Powers of Attorney that are used to appoint your financial agent: a “springing” power or a “general” power. A springing power “springs” into effect only upon your incapacitation, meaning that your financial agent can only manage your finances if your physicians have determined that you are unable to do so yourself. A general power, on the other hand, is effective immediately and lets your financial agent manage your finances even if you are still competent. There are benefits and detriments to either option.

Our estate plan packages only include the “springing” type of Financial Power of Attorney, to ensure that your financial decisions are made only by you unless your physicians have determined (in writing) that you are no longer competent to manage your financial affairs.

A Medical Power of Attorney is a document that should also be part of everyone’s estate plan. It designates which person will make your medical decisions if you are unable to do so yourself. Without this document in place, upon your incapacity, your loved ones would have to open a guardianship for you through the probate court, which typically costs thousands of dollars per year and involves heavy court supervision.

Unlike the Financial Power of Attorney, the Medical Power of Attorney can only be effective upon your incapacitation. Accordingly, your medical decisions must be made by you unless your physicians have determined (in writing) that you are no longer competent to make them yourself. In that event, your medical agent (a/k/a patient advocate) would be authorized to make medical decisions for you (without involving the probate court).

Our Medical Powers of Attorney include a provision granting your medical agent the authority to execute a Do Not Resuscitate (“DNR”) order on your behalf, if two physicians who have personally examined you have determined (in writing) that you have a terminal condition with no hope of recovering (from an accident or illness, for example). Without this authority, it would be possible for you to be kept alive artificially for years (while in a coma with no likelihood of waking up, for example).

A Last Will and Testament is a document that we strongly recommend be part of everyone’s estate plan. It designates who receives your assets upon your death, who will administer your estate, and importantly, who would care for your children if you pass away while they are still under the age of 18. The beneficiary options that we provide in our estate plan packages can be found here.

If you have a Last Will and Testament without a Trust, then a probate estate must be opened in the probate court upon your death (if any assets are titled solely in your name without valid beneficiary designations). This would require an involved estate administration process upon your death, including notice requirements related to family members, beneficiaries, and creditors. The probate process typically costs between $2,000 and $5,000 after court filing fees, an “inventory fee” (which is basically a small tax imposed on an estate based on the value of the estate’s assets), and legal/accounting fees.

Even if your estate plan includes a Trust, you would still need a simplified Last Will and Testament just in case any assets remain titled solely in your name upon your death. In that event, your Last Will and Testament would simply name your Trust as the beneficiary so that any assets that must pass through probate would still end up in your Trust. With a Trust, provided your assets are titled correctly at the time of your death, there would be no involvement with the probate court (which could save your family thousands of dollars).

A Single Trust is a revocable trust for a single person, meaning the Trust can be amended/modified or revoked at any time by such person. Having a Trust allows you to completely avoid the probate court process, typically saving your loved ones thousands of dollars in legal fees and court costs and also a great deal of time, as the administration of a trust is typically much simpler than the administration of an estate (for someone with only a Last Will and Testament, or with no estate planning documents at all). Further, a Trust is meant to be private, so it does not need to be filed in the public records of the probate court, unlike a Last Will and Testament.

A Trust designates who receives your assets upon your death and which person will be responsible for administering the trust (the “Trustee”). The beneficiary options that we provide in our estate plan packages can be found here.

We recommend that anyone who wants to avoid incurring unnecessary fees associated with estate administration through the probate court should have a Trust. Additionally, if you own several types of assets (real estate, investment accounts, retirement accounts, business interests, etc.) a Trust can generally better serve your needs.

A Joint Trust is a revocable trust for a married couple, meaning the Joint Trust can be amended/modified or revoked at any time by such couple, and can even be amended/modified or revoked after the first spouse passes away.

There are benefits and detriments to this option. The main benefit is simplicity. Upon the first spouse’s death, nothing needs to be done to administer the Joint Trust because it remains revocable. In effect, this is very similar to when a married couple owns real property or bank/investment accounts as joint tenants with right of survivorship. After the first death, the surviving spouse retains complete control.

However, this also means that the surviving spouse could amend/modify or revoke the Joint Trust after the first spouse’s death, including the beneficiary provisions. Since all of both spouse’s assets are intended to be governed by the Joint Trust, that could mean that the deceased spouse’s assets could theoretically benefit people unknown to the deceased spouse if the surviving spouse decided to change those provisions. The beneficiary options that we provide in our estate plan packages can be found here.

A Joint Trust is generally recommended for married couples that do not have any prior marriages or children outside of the marriage, and who are confident that the surviving spouse will abide by the deceased spouse’s wishes. If a Joint Trust does not work for your situation, you can schedule a consultation to discuss the other options that could work for you.